Construction giant Probuild and 17 other companies are in voluntary administration through Deloitte

Administrators have been called in after the national construction group collapsed with billions of dollars of projects on hold across the country. Full list of 18 companies involved.

Chris Herde and Glen Norris

4 min read

February 24, 2022 - 1:09PM

The Australian Business Network

Workers leave the Probuild worksite on 443 Queen Street. Picture: Zak Simmonds

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The South African parent company of construction giant Probuild has formally put its Australian arm on the company into voluntary administration

Deloitte Australia said 18 companies with WBHO Australia Group (WBHOA), which includes three construction and project management businesses of Probuild, Monaco Hickey were placed into administration at 10pm on Wednesday.

It is understood the Deloitte will not be “corporate undertakers” but are seeking to turn the company around and sell the business either in its entirety or individual companies or groups of companies.

They think they can preserve and resurrect the company.

Deloitte Turnaround & Restructuring partners Sal Algeri, Jason Tracy, Matt Donnelly and David Orr who have been appointed voluntary administrators were also appointed to Virgin Australia when it collapsed at the start of the Covid-19 pandemic.

The administrators are in talks today with unions and Deloitte will run ads in national newspapers on the weekend saying the company is for sale.

Deloitte Turnaround & Restructuring partners Sal Algeri, Jason Tracy, Matt Donnelly and David Orr were appointed voluntary administrators.

Originally established in Western Australia in 1987, WBHOA is today headquartered in Melbourne, with offices also in Sydney, Brisbane and Perth.

The Group currently has a number of active commercial and public sector projects in varying stages of development across Victoria, NSW, Queensland and Western Australia.

The Group directly employs approximately 750 people, and has annual revenues of over $1.4 billion.

Probuild’s Victoria Univetrsity City West Tower which is under construction in Melbourne.

The appointment of the Administrators follows WBHO’s decision to withdraw financial support from the Australian Group.

Mr Algeri said WBHOA has been a major contributor to the construction sector and the broader economy, including as a direct and indirect employer.

“The Covid-19 pandemic has created challenging trading conditions for many businesses, and for WBHOA, which has also been impacted by certain loss-making projects,” he said.

“Our immediate focus will be to undertake an urgent assessment of the entities’ financial positions and work with key stakeholders to stabilise the business and projects where possible.

“We will assess options to preserve value, and engage closely with creditor groups and other stakeholders across the spectrum, including clients, employees, unions, suppliers, contractors and subcontractors.

“We will also be commencing a sale and recapitalisation process in order secure a new owner for the businesses.”

Creditor queries should be directed to: Probuild@deloitte.com.au

On Wednesday hundreds of workers were seen pulling equipment and tools from Probuild constructions sites across the nation yesterday.

Workers leave the Probuild worksite on 443 Queen Street. Picture: Zak Simmonds

A worker at Cbus Property’s 443 Queen St project in Brisbane, who declined to be named, said the high-end apartment tower had been plagued by lengthy delays over the past two years.

“We were just told to pick our tools up because Probuild were pulling the pin on all their projects across Australia,” he said.

Another subcontractor said his firm was owed at least $250,000, with others owed substantially more. “It is going to run into the millions what tradies are owed,” he said.

In a statement CFMEU said it was currently seeking information from Probuild to understand the company’s situation and any likely impact on workers.

“As always, the union will work to ensure the interests of our members in the

construction industry are made the primary consideration,” it said.

Melbourne-based Probuild has major works around the country including the PDG developed 18-storey second stage of Elizabeth North in Melbourne, which will be the future headquarters of global biotech company CSL.

It was also building the Poly Australia developed office tower 1000 Latrobe in Melbourne’s Docklands.

Probuild is one of Australia’s largest construction companies, with work in hand at around $5bn.

According to its website, the company has thousands of apartments currently under construction and more than 370,000 square metres of retail work underway with the bulk of projects in Melbourne.

Other projects in Melbourne include the next stage of US equity giant Blackstone’s huge build-to-rent apartment development at Caulfield Village and the 496-apartment building Midtown MacPark Stage C1.

In Perth it is building the The Towers at Elizabeth Quay in Perth, Stage 2 and 3 and the 450-room W Hotel on Darling Harbour in Sydney.

Workers leave the Probuild worksite on 443 Queens Street. Picture: Zak Simmonds

Probuild was to be set to be sold to the China State Construction Engineering Corporation last year for about $300m. However, the Foreign Investment Review Board scuppered the deal after raising national security concerns.

In a statement to the Johannesburg Stock Exchange, WBHO said after the failure to sell Probuild last year they had implemented a “contingency plan incorporating a revised strategy for Probuild aimed at consolidating and stabilising the business.”

“The Australian construction environment has also become increasingly competitive … and the potential risk on large mega-building projects outweighs the current margins available.” the company said.

“With this in mind, the company has adopted a more conservative bidding strategy focused on securing lower-risk and less complicated projects.

“Based on this approach, it was the company’s intention to see some decline in the order book as we reduced our exposure to high-risk projects.”